Q2. Based on Financial statements of CAMC Hospital, calculate the following financial
ratios of the year 2012 and explain what it means for this hospital (1-point numeric number + 1
1-point financial interpretation of the ratio). No definitions accepted. Only what it means for this
hospitals. This is a mini case study, and you must take it as such to assess your critical thinking)
1. Quick Ratio
2. Average collection period.
3. Inventory turnover.
4. Fixed Asset Turnover Ratio.
5. Non-operating gain ratio
Is this it Net Credit Sales? Where would i find it?
CAMC HEALTH SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2013 AND 2012 (In thousands) 2013 2012 ASSETS CURRENT ASSETS: $ 14,445 147,057 5,000 Cash and cash equivalents Short-term investments Current portion of assets limited as to use Patient receivables-net of allowances for uncollectible accounts of $19,982 in 2013 and S22,093 in 2012 Other receivables Estimated amounts due from third-party payors Inventories Prepaid expenses and other 28,831 205,578 5,900 106,601 10,138 7,751 118,887 13,084 11,096 18,730 7,069 17,555 8,644 335,368 Total current assets 390,998 ASSETS LIMITED AS TO USE 361,461 282,403 OTHER INVESTMENTS 20,742 20,669 PROPERTY, EQUIPMENT AND INFORMATION SYSTEMS: Land Buildings and improvements Equipment and software costs Construction in progress 42,797 371,111 477,497 40,723 41,869 351,433 510,151 20,401 932,128 Total property, equipment and information systems 923,854 Less accumulated depreciation and amortization (616,601) (627,393) 315,527 296,461 Property, equipment and information systems net 16,950 OTHER ASSETS 19,088 $ 953,989 TOTAL $1,105,678 (Continued) CAMC HEALTH SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2013 AND 2012 (In thousands) 2012 2013 LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts payable and accrued expenses Self-insurance reserves Derivative obligation Accrued payroll and payroll-related expenses Estimated amounts due to third-party payors Current maturities of long-term debt and capital lease obligations $ 51,198 5,000 25,296 41,319 19,030 8,143 55,295 5,900 14,170 41,638 16,990 12,667 Total current liabilities 146,660 149,986 LONG-TERM LIABILITIES: Long-term debt and capital lease obligations - less current maturities Retirement obligations Self-insurance reserves Other 404,235 13,845 13,378 10,610 333,130 13,531 15,426 10,485 Total long-term liabilities 442,068 372,572 522,558 Total liabilities 588,728 NET ASSETS: Unrestricted Noncontrolling interest in joint ventures 447,356 358 370,938 317 447,714 Unrestricted total 371,255 47,776 21,460 Temporarily restricted Permanently restricted 38,946 21,230 516,950 431,431 Total net assets $ 953,989 TOTAL S1.105.,678 See notes to consolidated financial statements. (Concluded) CAMC HEALTH SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (In thousands) 2013 2012 UNRESTRICTED REVENUE AND OTHER SUPPORT: Patient service revenue (net of contractual allowances and discounts) Provision for bad debts $961,721 (85,515) $938,315 (78,774) Net patient service revenues less provision for bad debts 876,206 859,541 Other revenue Investment income-net Net assets released from restrictions 40,996 49,822 1,845 41,045 33,376 1,701 935,663 Total unrestricted revenue and other support 968,869 EXPENSES: Salaries and wages Employee benefits Professional compensation and fees Supplies and other Depreciation and amortization Medicaid provider tax Interest and debt expense Change in fair value of derivatives 346,445 331,286 104,261 19,614 362,729 36,107 22,503 16,312 (14,083) 95,343 19,689 332,127 37,544 20,292 15,158 (2,710) Total expenses 893,888 848,729 Controlling and EXCESS OF REVENUES OVER EXPENSES noncontrolling interest 74,981 86,934 LESS EXCESS OF REVENUES OVER EXPENSES Noncontrolling interest (97) (101) EXCESS OF REVENUES OVER EXPENSES Net of noncontrolling interest 74,884 86,833 OTHER CHANGES IN UNRESTRICTED NET ASSETS: Net assets released from restrictions for capital expenditures Change in retirement obligations actuarial loss and prior service cost Distributions to noncontrolling interest Contributions for capital expenditures 242 951 249 (1,071) (190) 314 220 S 86,236 S 76,459 INCREASE IN UNRESTRICTED NET ASSETS See notes to consolidated financial statements. CAMC HEALTH SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (In thousands) 2013 2012 OPERATING ACTIVITIES: S 85.519 S 92.560 Increase in net assets Adjustments to reconcile increase in net assets to net cash provided by operating activities: Change in fair value of derivatives (Gain) Loss on disposal of fixed assets Change in retirement obligations actuarial loss and prior service cost Depreciation and amortization Provision for bad debts Unrcalized gains cn altemative investments Realized gains on altemative securities Realized and unrealized gain on limited as to use trading investments Net restricted contributions and investment income Distributions to noncontrolling interest Changes in assets and kabilities Patient receivables (14,083) (491) (951) 36,107 85,515 (2,710) 24 1,071 37,544 78,774 (1,272) (1,450) (13,697) (496) (26,300) (11,046) (65) (8,274) 190 (73.229) 2,946 (58.521) (81.990) 6,406 (44,827) (506) 9.278 (5,896) (392) (385) Ocher receivables Short term trading investments Inventories, prepaid expenses, and other Estimated amounts due from/to third-party payors Accounts payable and accrued expenses Accrued payroll and payroll-related expenses 4,696 1,305 2,551 319 Other liabilities (279) Net cash provided by operating activities 33,497 64.448 INVESTING ACTIVITIES: Capital expenditures Capital expenditures-Cancer Center Purchases of aternative investments Limited as to use trading investments Proceeds from the sale of alternative investments Restricted cash as collateral Restricted cash from collateral (38,332) (10,589) (5,909) (67,491) (37,199) (297) (36,060) 6,762 (14,250) 12.360 4,845 (7,500) 22.820 (102,1 56) Net cash used in investing activities (68,684) FINANCING ACTIVITIES: (8,066) 80,000 1,096 (1,096) 65 11.046 Principal payments on debt obligations and capital lease obligations Borrowings of debt obligations Borrowings under lines of credit Repayment under lines of credit Distributions to noncontrolling interest Net restricted contributions and investment income (8,915) 1,033 (1.033) (190) 8.274 Net cash provided by (used in) financing activities 83,045 (831) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 14,386 (5,067) CASH AND CASH EQUIVALENTS - Beginning of year 14,445 19512 S 28,831 S 14,445 CASH AND CASH EQUIVALENTS - End of year SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: S 11.918 S 10.879 Cash paid during the year for interest S 1.605 Capital assets acquired under capital lease obligations $ 1.218 S LISI Capital expenditures remaining in accounts payable at year-end See notes to consolidated financial statements. 5. ASSETS LIMITED AS TO USE AND INVESTMENTS Investments and assets limited as to use as of December 31, 2013 and 2012, consist of the following: 2013 2012 Short term investments: $ 57,620 S 22,346 Cash and cash equivalents Corporate stocks and equity mutual funds Fixed income securities and mutual funds 74,888 111,932 12,779 73,070 Total short term investments $205,578 $147,057 Assets Limited as to Use: Self-insurance: Cash and cash equivalents U.S. treasury and U.S. government agency obligations Corporate stocks Alternative investments Equity mutual funds Fixed income securities and mutual funds 2,000 2,046 14,176 2,748 12,847 5,910 1,874 3,536 10,137 2,748 9,650 4,697 Total self-insurance 39,727 32,642 Board-designated and restricted funds: Cash and cash equivalents Corporate stocks and equity mutual funds Corporate bonds and fixed income mutual funds Alternative investments 20,247 150,738 91,278 13,313 403 121,296 43,405 14,113 Total board-designated and restricted funds 275,576 179,217 Trustee-held funds: Debt service reserve fund - cash equivalents and U.S. government agency obligations Acquisition fund- cash equivalents Collateral on derivatives-cash equivalents Other assets: Cash equivalents Other fixed income 15,543 23,485 3,860 15,439 33,891 19,180 601 400 6,634 8,569 Total trustee-held funds 52,058 75,544 367,361 287,403 Total assets limited as to use and investments Less current portion (5,900) (5,000) $ 361,461 S282,403 Assets limited as to use and investments net of current portion Other Investments: Alternative investments S 20,742 S 20,669 Board-designated and trustee-held funds consist of the Foundation's and CAMC's investments set aside for capital, debt, and other similar expenditures. Self-insurance assets relate primarily to the malpractice and general liability self-insurance and workers' compensation programs. The trustee-held acquisition project fund was set aside from the proceeds of the 2008 Series A bonds and 2009 Series A bonds for future capital improvements. As of December 31, 2013, the 2009 Series A bond fund was zero. Trustee- held investments also include funds set aside for certain obligated group debt service requirements (see CAMC HEALTH SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2013 AND 2012 (In thousands) 2013 2012 ASSETS CURRENT ASSETS: $ 14,445 147,057 5,000 Cash and cash equivalents Short-term investments Current portion of assets limited as to use Patient receivables-net of allowances for uncollectible accounts of $19,982 in 2013 and S22,093 in 2012 Other receivables Estimated amounts due from third-party payors Inventories Prepaid expenses and other 28,831 205,578 5,900 106,601 10,138 7,751 118,887 13,084 11,096 18,730 7,069 17,555 8,644 335,368 Total current assets 390,998 ASSETS LIMITED AS TO USE 361,461 282,403 OTHER INVESTMENTS 20,742 20,669 PROPERTY, EQUIPMENT AND INFORMATION SYSTEMS: Land Buildings and improvements Equipment and software costs Construction in progress 42,797 371,111 477,497 40,723 41,869 351,433 510,151 20,401 932,128 Total property, equipment and information systems 923,854 Less accumulated depreciation and amortization (616,601) (627,393) 315,527 296,461 Property, equipment and information systems net 16,950 OTHER ASSETS 19,088 $ 953,989 TOTAL $1,105,678 (Continued) CAMC HEALTH SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2013 AND 2012 (In thousands) 2012 2013 LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts payable and accrued expenses Self-insurance reserves Derivative obligation Accrued payroll and payroll-related expenses Estimated amounts due to third-party payors Current maturities of long-term debt and capital lease obligations $ 51,198 5,000 25,296 41,319 19,030 8,143 55,295 5,900 14,170 41,638 16,990 12,667 Total current liabilities 146,660 149,986 LONG-TERM LIABILITIES: Long-term debt and capital lease obligations - less current maturities Retirement obligations Self-insurance reserves Other 404,235 13,845 13,378 10,610 333,130 13,531 15,426 10,485 Total long-term liabilities 442,068 372,572 522,558 Total liabilities 588,728 NET ASSETS: Unrestricted Noncontrolling interest in joint ventures 447,356 358 370,938 317 447,714 Unrestricted total 371,255 47,776 21,460 Temporarily restricted Permanently restricted 38,946 21,230 516,950 431,431 Total net assets $ 953,989 TOTAL S1.105.,678 See notes to consolidated financial statements. (Concluded) CAMC HEALTH SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (In thousands) 2013 2012 UNRESTRICTED REVENUE AND OTHER SUPPORT: Patient service revenue (net of contractual allowances and discounts) Provision for bad debts $961,721 (85,515) $938,315 (78,774) Net patient service revenues less provision for bad debts 876,206 859,541 Other revenue Investment income-net Net assets released from restrictions 40,996 49,822 1,845 41,045 33,376 1,701 935,663 Total unrestricted revenue and other support 968,869 EXPENSES: Salaries and wages Employee benefits Professional compensation and fees Supplies and other Depreciation and amortization Medicaid provider tax Interest and debt expense Change in fair value of derivatives 346,445 331,286 104,261 19,614 362,729 36,107 22,503 16,312 (14,083) 95,343 19,689 332,127 37,544 20,292 15,158 (2,710) Total expenses 893,888 848,729 Controlling and EXCESS OF REVENUES OVER EXPENSES noncontrolling interest 74,981 86,934 LESS EXCESS OF REVENUES OVER EXPENSES Noncontrolling interest (97) (101) EXCESS OF REVENUES OVER EXPENSES Net of noncontrolling interest 74,884 86,833 OTHER CHANGES IN UNRESTRICTED NET ASSETS: Net assets released from restrictions for capital expenditures Change in retirement obligations actuarial loss and prior service cost Distributions to noncontrolling interest Contributions for capital expenditures 242 951 249 (1,071) (190) 314 220 S 86,236 S 76,459 INCREASE IN UNRESTRICTED NET ASSETS See notes to consolidated financial statements. CAMC HEALTH SYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (In thousands) 2013 2012 OPERATING ACTIVITIES: S 85.519 S 92.560 Increase in net assets Adjustments to reconcile increase in net assets to net cash provided by operating activities: Change in fair value of derivatives (Gain) Loss on disposal of fixed assets Change in retirement obligations actuarial loss and prior service cost Depreciation and amortization Provision for bad debts Unrcalized gains cn altemative investments Realized gains on altemative securities Realized and unrealized gain on limited as to use trading investments Net restricted contributions and investment income Distributions to noncontrolling interest Changes in assets and kabilities Patient receivables (14,083) (491) (951) 36,107 85,515 (2,710) 24 1,071 37,544 78,774 (1,272) (1,450) (13,697) (496) (26,300) (11,046) (65) (8,274) 190 (73.229) 2,946 (58.521) (81.990) 6,406 (44,827) (506) 9.278 (5,896) (392) (385) Ocher receivables Short term trading investments Inventories, prepaid expenses, and other Estimated amounts due from/to third-party payors Accounts payable and accrued expenses Accrued payroll and payroll-related expenses 4,696 1,305 2,551 319 Other liabilities (279) Net cash provided by operating activities 33,497 64.448 INVESTING ACTIVITIES: Capital expenditures Capital expenditures-Cancer Center Purchases of aternative investments Limited as to use trading investments Proceeds from the sale of alternative investments Restricted cash as collateral Restricted cash from collateral (38,332) (10,589) (5,909) (67,491) (37,199) (297) (36,060) 6,762 (14,250) 12.360 4,845 (7,500) 22.820 (102,1 56) Net cash used in investing activities (68,684) FINANCING ACTIVITIES: (8,066) 80,000 1,096 (1,096) 65 11.046 Principal payments on debt obligations and capital lease obligations Borrowings of debt obligations Borrowings under lines of credit Repayment under lines of credit Distributions to noncontrolling interest Net restricted contributions and investment income (8,915) 1,033 (1.033) (190) 8.274 Net cash provided by (used in) financing activities 83,045 (831) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 14,386 (5,067) CASH AND CASH EQUIVALENTS - Beginning of year 14,445 19512 S 28,831 S 14,445 CASH AND CASH EQUIVALENTS - End of year SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: S 11.918 S 10.879 Cash paid during the year for interest S 1.605 Capital assets acquired under capital lease obligations $ 1.218 S LISI Capital expenditures remaining in accounts payable at year-end See notes to consolidated financial statements. 5. ASSETS LIMITED AS TO USE AND INVESTMENTS Investments and assets limited as to use as of December 31, 2013 and 2012, consist of the following: 2013 2012 Short term investments: $ 57,620 S 22,346 Cash and cash equivalents Corporate stocks and equity mutual funds Fixed income securities and mutual funds 74,888 111,932 12,779 73,070 Total short term investments $205,578 $147,057 Assets Limited as to Use: Self-insurance: Cash and cash equivalents U.S. treasury and U.S. government agency obligations Corporate stocks Alternative investments Equity mutual funds Fixed income securities and mutual funds 2,000 2,046 14,176 2,748 12,847 5,910 1,874 3,536 10,137 2,748 9,650 4,697 Total self-insurance 39,727 32,642 Board-designated and restricted funds: Cash and cash equivalents Corporate stocks and equity mutual funds Corporate bonds and fixed income mutual funds Alternative investments 20,247 150,738 91,278 13,313 403 121,296 43,405 14,113 Total board-designated and restricted funds 275,576 179,217 Trustee-held funds: Debt service reserve fund - cash equivalents and U.S. government agency obligations Acquisition fund- cash equivalents Collateral on derivatives-cash equivalents Other assets: Cash equivalents Other fixed income 15,543 23,485 3,860 15,439 33,891 19,180 601 400 6,634 8,569 Total trustee-held funds 52,058 75,544 367,361 287,403 Total assets limited as to use and investments Less current portion (5,900) (5,000) $ 361,461 S282,403 Assets limited as to use and investments net of current portion Other Investments: Alternative investments S 20,742 S 20,669 Board-designated and trustee-held funds consist of the Foundation's and CAMC's investments set aside for capital, debt, and other similar expenditures. Self-insurance assets relate primarily to the malpractice and general liability self-insurance and workers' compensation programs. The trustee-held acquisition project fund was set aside from the proceeds of the 2008 Series A bonds and 2009 Series A bonds for future capital improvements. As of December 31, 2013, the 2009 Series A bond fund was zero. Trustee- held investments also include funds set aside for certain obligated group debt service requirements (see
